Asian markets swung between gains and losses as investors await the release of Chinese manufacturing data. China's official manufacturing purchasing manager's index (PMI) for May will be published on Sunday. Analysts are forecasting a slight rise from April's 50.4 to 50.6.
The Nikkei is down 0.3 per cent after data showed a slowdown in industrial production and household spending in April. However, consumer prices rose at their fastest pace for 23 years suggesting Japan is getting a grip on its deflation problem.
"The timelier Tokyo CPI showed that the pass-through of the higher tax continued in May: The headline measure leapt by another 0.5 per cent month-on-month. Looking ahead, the sharp fall in import price inflation points to a slowdown in consumer inflation in coming months, which should provide some relief to household's battered finances", said Marcel Thieliant, Japan economist at Capital Economics.
The unemployment rate remained unchanged at 3.6 per cent but rising job vacancies should bring the number down further still.
Yesterday data showed US growth took a hit from the weather in the first quarter, with latest estimates showing a one per cent contraction at an annualised pace.
Economists were expecting a smaller decline of 0.5 per cent. This was the first contraction the economy's seen since 2011, and the second since the US emerged from recession six years ago. However, fewer Americans than forecast filed for unemployment benefit.